- The Washington Times - Saturday, July 14, 2001

Washington-area retailers are drawing a bead on shoppers with tax rebates to burn as the government prepares to put the windfall payments in the mail.
Beginning next week, Lowe's plans to suggest home-improvement projects for under $300 and under $600 on its Web site and in its stores. Home Depot is already advertising how people can spend their tax refunds on energy-efficient products.
The country's largest discounter, Wal-Mart, says it will cash consumers' checks free of charge, with the hopes that people will use that money in the store.
Even Pizza Hut has jumped on the tax-cut bandwagon and has incorporated it into a new commercial boasting an economic windfall of its own — the Twisted Crust pizza tax-cut special for $9.99.
Taxpayers can count on receiving about $100 billion in rebate checks between July 20 and Sept. 30. The size of the checks will range from $300 for single taxpayers to $600 for married couples.
"The bottom line is if you put money in people's pockets — essentially, free money — they are going to look at making purchases," said Steve Pfister, senior vice president of government relations at the National Retail Federation. "We're optimistic this money will be spent in retailers."
The tax refund couldn't come at a better time for retailers, who typically get the largest portion of their sales in the third and fourth quarters, thanks to holiday shopping.
The first half of the year has been frustrating for retailers, who have had soft sales as consumers remain cost-conscious and less willing to spend.
The Census Bureau's latest figures, released yesterday, show a disappointing 0.2 percent gain in June retail sales over the previous month.
"Confidence surveys show consumers looking to the future with increased optimism," said Rosalind Wells, chief economist for the retail federation, in a statement. "Aggressive rate cuts by the Federal Reserve and the long-awaited tax rebates could be the impetus retailers have been waiting for to re-energize consumer spending in the second half."
And some retailers — willing to spend extra marketing dollars to grab consumers' attention — are taking full advantage of the opportunity.
"It's a little bit early to tell if people will save, pay down debt or spend it in stores," said Chris Ahearn, a spokeswoman for Lowe's. "So we're encouraging them to spend it on something that will give them lasting enjoyment."
The Wilkesboro, N.C., home-improvement chain will have more than 100 projects listed on its Web site, www.lowes.com, that would cost just under $300 and $600. Beginning next week, Lowe's will also advertise through in-store announcements and fliers inside shopping bags suggesting to customers ways to maximize their tax refunds at Lowe's.
Home Depot is taking advantage of the tax-refund opportunity and combining two advertising messages together in their latest national television and radio campaign. It suggests customers invest their tax-refund checks in energy-conservation products such as insulation, fluorescent bulbs and energy-efficient appliances.
Sometimes those purchases could result in as much as a 30 percent return on investment, said John Simley, a Home Depot spokesman.
Wal-Mart customers have three options:
* They can cash the checks at Wal-Mart's layaway desks or Sam's Club's member service desks with no purchase necessary.
* Convert the checks to a Wal-Mart/Sam's Club shopping card.
* Use the checks as currency for purchasing merchandise there.
"We're providing this service for the convenience of our customers, and to thank them for shopping with us," said Tom Coughlin, president and chief executive officer of the Wal-Mart Stores division, in a statement. "Whether customers want to save for the holiday season, or spend the money now on something for the family, we want to make sure our customers have the option to use every penny of the check as they see fit."

LOAD COMMENTS ()

 

Click to Read More

Click to Hide